Everett Co. was organized on July 1, 2015. Quarterly financial statements are pr

Question

Everett Co. was organized on July 1, 2015. Quarterly financial statements are prepared. The unadjusted and adjusted trial balances as of September 30 are shown below.

EVERETT CO.
Trial Balance
September 30, 2015

Journalize the annual adjusting entries that were made. Then, prepare an income statement of retained earnings for the 3 months ending sept. 30, 2015. Prepare a balance sheet at Sept 30. If the note bears interest at 12% how many months has it veen outstanding?

EVERETT CO.
Trial Balance
September 30, 2015

Unadjusted Adjusted Dr. Cr. Dr. Cr. Cash $ 8,729 $ 8,729 Accounts Receivable 10,445 11,537 Supplies 1,501 607 Prepaid Rent 2,207 1,204 Equipment 18,400 18,400 Accumulated Depreciation—Equipment $    - 0 - $     682 Notes Payable 9,300 9,300 Accounts Payable 2,494 2,494 Salaries and Wages Payable - 0 - 724 Interest Payable - 0 - 93 Unearned Rent Revenue 1,915 1,061 Common Stock 22,470 22,470 Dividends 1,644 1,644 Service Revenue 16,822 17,914 Rent Revenue 1,400 2,254 Salaries and Wages Expense 8,039 8,763 Rent Expense 1,883 2,886 Depreciation Expense 682 Supplies Expense 894 Utilities Expense 1,553 1,553 Interest Expense 93 $ 54,401 $ 54,401 $ 56,992 $ 56,992

Explanation / Answer

Everett Co. Amount in $ Date General Jounral Debit Credit Cash 0 September 30, 2015 Depreciation expense 682 Accumulated Depreciation 682 To record the depreciation expense September 30, 2015 Supplies expense 894 Supplies 894 To record the supplies expense September 30, 2015 Rent expense 1003 Prepaid rent 1003 To record the rent expense September 30, 2015 Accounts Receivable 1092 Service Revenue 1092 To record the service revenue September 30, 2015 Unearned Rent revenue 854 Rent Revenue 854 To record the rent revenue September 30, 2015 Salary and wages expense 724 Salary and wages Payable 724 To record the salary and wages expense September 30, 2015 Interest expense 93 Interest Payable 93 To record the interest expense Income statement for 3 months ending September 30, 2015 Revenue from services 17914 Rent Revenue 2254 Total Revenue 20168 Less Expenses Salary and wages expense 8763 Rent expense 2886 Supplies expense 894 Depreciation expense 682 Utilities expense 1553 Interest expense 93 Total expenses 14871 Net Income 5297 Statement of retained earnings Retained earnings Beginning balance 0 Add ; net Income for the period 5297 Less : Dividends 1644 Retained earnings Ending balance 3653 Balance sheet as on September 30, 2015 Asset Current asset Cash 8729 Accounts receivable 11537 Prepaid rent 1204 Supplies 607 Total of current asset 22077 Non-current asset Equipment 18400 Accumulated depreciation on equipment 682 17718 Total asset 39795 Liabilities and stockholder's equity Liabilities Current Liabilities Accounts payable 2494 Salary and wages payable 724 Interest payable 93 Unearned rent revenue 1061 Non-current liabilities 4372 Notes Payable 9300 Total current liabilites 9300 Total liabilities 13672 Stockholder's equity Common stock 22470 Retained earnings 3653 Total stockholder's equity 26123 Total Liabilities and stockholder's equity 39795 Notes Payable bears 12% interest , the notes has been outstanding for one month. =93/9300% 1 % Notes bears 12% interest for 12 months so for 1% its one month We appreciate the rating of our answers. It encourages us to improve/maintain our quality of answers. Thank You.

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